Get ready for an amazing presentation. The IAAPA Legends panel is hosted each year by industry leader Bob Rogers, Chairman of BRC Imagination Arts. This 2003 panel was one of the first of Bob Rogers’ annual Legends panels. This panel featured three exceptional voices from the attractions industry. All three have now left this earth, but all three have left this wisdom behind for us.
Marty Sklar was the President of Walt Disney Imagineering and the creative leader for the company for over twenty-five years. Harrison “Buzz” Price not only invented the theme park economic feasibility industry, but he was instrumental in helping Walt Disney locate Disneyland park in Anaheim, California. George Millay created two genres in the attractions industry: The marine park and the water park as founder of both Sea World and Wet ‘n Wild, the first parks of their kind, respectively.
The panel took place during the immediate aftermath of the attacks of September 2001. Thus, it was titled, “Planning in Uncertain Times”. This may be one of the last known recordings of George Millay speaking.
- Marty Sklar highlighted his experiences with legendary UCLA basketball coach John Wooden and his future boss, Walt Disney. In uncertain times, the lessons of two masters converged: Planning, consistency and organization were the keys to their successes. Walt Disney added creativity to the first three.
- Buzz Price, a numbers man by trade, said that the best way to plan for uncertainty was to use a Long Range Planning Services “LRPS” model. This model used a 3-5 year rolling average of revenues revised annually or semi-annually to plan for the future.
- George Millay said that he saw opportunity in two areas of the attractions business. First, on America’s harbors and waterfronts. The second was the opportunity for existing parks in colder climates to open an entire second season by converting to winter operations for the family. New clothing technology has made it possible for families to have fun in temperatures of twenty five degrees or less now, he explained. This was not possible in previous generations. And because capital expenditures would be paid for by summer operations, a true winter operation would add revenue almost entirely to the bottom line.
- In one of the most touching moments of the day, Bob Rogers asked the panel how each of them felt about the year 2015. George Millay reflected that he hoped he would be alive and in good health. He would pass away from lung cancer just three years later.
- A surprising revelation came from Buzz Price. He used the San Diego zoo as a comparable for Disneyland when doing the economic feasibility study for the park. The San Diego zoo had many of the same features: Large crowds, a double season, and a strong family demographic as Disneyland would have. Thus, it was a good comparable to use in the study.
- Buzz added that Walt Disney made Disneyland a success because he tripled per capita spending and doubled the market penetration of attractions he compared in his study. This was an important admission by Buzz Price. This meant that Disney could experiment with new attraction ideas not tried before.
- George Millay was unable to raise capital for Sea World. He said, “I worked for a year and a half raising the original capital for Sea World. And I was a failure. What happened is Marineland of the Pacific went public. And as soon as I got a hold of that prospectus, the money fell into place within ninety days! I don’t know if we would have ever gotten over the hump had it not been for Marineland.”
- Regarding Disney’s California Adventure, Sklar made an honest admission about its planning: “You’re nuts to try build a park next to Disneyland that’s half the size and charge the same amount of money for admission.” Buzz Price thought that perhaps the Disney company waited too long to build the park and should have proceeded in the 1960’s.
George Millay’s Do’s and Don’t for Entrepreneurs Wanting to Own their Own Park:
- Do: Always try to buy the land you are developing. Leases can be self defeating.
- Don’t lease: Your ideas, hard work and capital first create wealth for the landlord.
- Do: If you cannot purchase the land, get an option to buy the land at a future date at two or three times the original valuation. A landlord will go for an option that he thinks is high. But spinning turnstiles sometimes makes the original number look cheap.
- Don’t: Forget to spend as soon as you ink a deal, spend substantial capital on your attraction.
- Do: Get options to purchase surrounding land. It’s easier to acquire options on surrounding land before the park opens.
- Do: Remember that more money is usually made on real estate than on park revenues.
- Do: Bargain hard with real estate developers. They act enthusiastic about your deal, but they are really just excited about what your deal will do for their surrounding property. Use your ideas and capital as leverage to get a better deal.
- Do: Get a non-compete on land surrounding your property, and make that agreement as diversified as possible.
- Don’t ever agree to a raise in rent at a future date based on higher revenues. The future is tough to ponder.
- Don’t throw the landlord “a bone” unnecessarily.
- Don’t ever feel sorry for the landlord. Sooner or later he will be your enemy. If he wants a favor, get a concession. His heirs may not be that easy to deal with either.
- Do remember: When a quid pro quo exists, take advantage of it. Give landlords no quarter.
- Don’t: If you take a company public. Don’t treat stock options for your key players lightly.
- Do: Use cash, bonuses, 401k, and salary raises to aid in employee retention.
- Don’t go public just because a market is hot or just because an underwriter wants your business. Some promoters are not suited to running a public company.
- Do remember: When you’re private, you run the company. When you’re a public company, lawyers and accountants have far too much to say. Don’t be at the whim of securites investors. It is better to stay private.
- Do: When forming a new venture, find investors and stockholders who are emotionally and psychologically in sync with you and your objectives.
- Do: When you need capital, get it when you can. But knowing an investor’s goals are important. Keeping investors happy is tough enough but to deal with an emotional investor whose objectives are not the same as yours can be disturbing.
- Go home, look around. Investigate and start dreaming. But don’t make dreams your aim.
Full audio here: